U.K. Regulator Eyeing One-Day Auction for Satellite TV Operator Sky

With an apparent impasse on competing acquisition offers accepted by Sky shareholders from 21stCentury Fox, Comcast and The Walt Disney Co., a U.K. regulatory agency is set to take the unusual step of authorizing a one-day auction between the competing suitors.

The Panel on Takeovers and Mergers Sept. 20 issued a statement declaring that after discussions with all parties involved, an auction for controlling interest in Sky would begin at 5 p.m. on Sept. 21 and end sometime on Sept. 22 after three rounds of bidding. The bids will not be made public during the auction but will reportedly be made available by Sept. 24.

“On the basis that neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist for the purposes of ‘Rule 32.5 of the Takeover Code’”, wrote the panel.

The Panel said that by 7.00 am (London time) on Sept. 24, each of the Sky suitors is required to make an announcement under “Rule 2.7 of the Code” of a revised offer in respect of its latest bid lodged in accordance with the auction procedure (or alternatively, if it did not lodge an increased bid during the auction procedure, a confirmation of its pre-existing offer).

To accommodate the auction, both Comcast, Fox (and Disney, which is acquiring 20thCentury Fox and Fox’s 39% stake in Sky for $71 billion) extended the merger deadline until Oct. 6.

With 23 million subscribers across the U.K., Italy and Germany, Sky is a lucrative pay-TV operator and asset to Comcast and Disney looking to expand their respective brands globally (Comcast) and thwart Netflix’s ongoing global reach (Disney). The company generated more than $12.9 billion in revenue in 2017.

Sky investors have long eyed a bidding war for the company, which is why the stock is trading significantly higher (£15.78) than Comcast’s $34 billion (£14.75 per share) offer compared to Fox’s £14 per share bid.

Indeed, neither offer has resonated with Sky shareholders, with less 30% of stakeholders tendering Comcast’s offer compared to 0.07% for Fox’s offer.

A timeline on the Sky acquisition is as follows:

On Dec. 15, 2016, Fox announced a cash offer for the shares in Sky it did not already own at £10.75 per Sky share.

On Feb. 27, 2018, Comcast announced that it was considering making an offer for Sky. On April 25, Comcast announced a cash offer at £12.50 per Sky share. Later that day, the independent directors of Sky announced that they were withdrawing their recommendation of the Fox offer.

On July 11, Fox announced an increased cash offer for Sky at £14.00 per Sky share. Later that day, Comcast upped its cash offer for Sky at £14.75 per Sky share.

‘Incredibles 2’ Home Video to Include ‘Auntie Edna’ Mini Movie

Walt Disney Studios Home Entertainment will release Pixar’s Incredibles 2 digitally Oct. 23 and on Blu-ray, DVD and 4K Ultra HD Blu-ray Nov. 6.

The sequel, which picks up directly after the events of the 2004 original film, finds Helen (voiced by Holly Hunter) recruited to be the face of a public relations effort to restore the legal status of superheroes, leaving Bob (Craig T. Nelson) to deal with keeping track of their super-powered children, including the emerging powers of baby Jack-Jack.

In his Twitter feed Sept. 5, director Brad Bird announced the in-home release of the hit animated superhero film will include the short film Auntie Edna, detailing the events of the night Edna Mode babysat Jack-Jack.

“Many of you have suggested we show what transpired the night E babysat Jack-Jack. Well, we were WAAAY ahead of you!” Bird tweeted.

The new short, which will be available with the Blu-ray and digital versions of the film, would parallel a mini-movie called Jack-Jack Attack that was included with the DVD of the first Incredibles in 2005, which chronicled the baby’s night with a babysitter during the events of that film.

Incredibles 2 has earned more than $602 million at the domestic box office and $1.17 billion worldwide.

The Blu-ray, DVD and digital versions of the film will include audio commentary and the short film Bao.

In addition to the Auntie Edna short, the Blu-ray and digital releases will also include 10 deleted scenes with introductions outtakes; a collection of mini-documentaries about the film’s heroes and villains; the featurette “Super Stuff,” about the design of the “Incredibles” world; a profile of production designer Ralph Eggleston; the featurette Strong Coffee: A Lesson in Animation With Brad Bird,” a profile of the director and his history with Pixar;”Paths to Pixar: Everyday Heroes,” a featurette that focuses on the parents who worked on the film and their personal connections to it; “SuperBaby,” a hybrid of documentary and music video that looks at how Jack-Jack came to life onscreen; a “SuperBaby” music video; character theme songs; vintage toy commercial TV spots; a toolkit montage; global Incredibles 2 trailers; and a behind-the-scenes featurette about the making of Bao.

Digital bonus materials may vary depending on the retailer.

Digital versions of the film will include two exclusive extras: “The Coolest Guy in Show Business,” a partially illustrated documentary about Samuel L. Jackson’s love of comic books; and two “SuperScene Breakdowns,” an in-depth examination of the making of two scenes in the film.

Redbox Says It Will Still Sell Codes to Disney Movies — Just Not the New Ones

A federal judge on Aug. 30 granted the Walt Disney Co.’s request for a preliminary injunction against Redbox selling digital codes to Disney movies.

However, the ban only applies to newer “combo pack” releases with a revised disclaimer on the package. Redbox says this means it may continue selling digital codes to earlier Disney releases such as Frozen and “Star Wars” movies.

Judge Dean Pregerson ruled that Disney’s amended language accompanying packaged media combo retail releases (which include digital codes) sufficiently prohibits private parties from selling copyrighted content without permission.

“Because Redbox did not obtain an ownership right to any digital content when it purchased combo Packs, Disney has adequately shown that it is likely to succeed on its claim that Redbox encouraged Redbox customers to infringe Disney’s copyrights by redeeming codes in violation of the license terms set forth on the redemption sites,” Pregerson wrote.

In February, a federal court denied Disney a preliminary injunction against Redbox after the studio alleged the kiosk vendor committed copyright misuse on 19 of its most recent movies. Disney and subsidiaries Lucasfilm and Marvel Studios in April filed an amended complaint against Redbox, including changing user-guidelines on its packaged-media releases, beginning with Black Panther.

In a statement to Media Play News, Redbox said, “In a second attempt to obtain a broad injunction against Redbox regarding the sale of digital codes, Disney asked the court to retreat from its prior ruling that Disney abused its copyright on some 19 Disney, Pixar, Lucasfilm and Marvel titles. The court previously found that Disney’s copyrights for these titles were unenforceable against Redbox.

“Nothing disturbs that prior ruling in favor of Redbox. Redbox remains free to sell codes for those prior titles. This morning’s ruling is limited to digital codes for certain titles, like Black Panther, that contain new disclosures, but were distributed after the 19 titles listed in Disney’s complaint. Redbox has never attempted to sell, and had no plans to sell, digital codes for Black Panther. Disney, therefore, has not been damaged by Redbox’s business practices, and the ruling compels no change in Redbox’s business practices.

“The same isn’t true for Disney. In addition to having been forced to change misleading language on its packaging and its websites, Disney now must offer consumers the ability to return digital codes or combo packs for a refund if they disagree with digital license terms. In fact, the court’s order expires in 90 days unless Disney ‘clearly and prominently indicates’ that consumers can obtain a refund if they do not agree with Disney’s restrictions.

“The court’s decision once again maintains Redbox’s stance as an advocate for the consumer. We look forward to finalizing our victories in court.”

Disney is the only studio that won’t sell discs directly to Redbox, forcing the company to buy them at retail. Last year, Redbox also began offering for sale the digital codes that come with its purchased Disney discs, citing the First Sale Doctrine to federal copyright law, which provides that someone who lawfully acquires a copyrighted work is allowed to sell or dispose of it however they want. Video retailers in the early 1980s successfully argued that First Sale gave them the right to rent videocassettes they had legally purchased and pocket the rental fees.

Facebook, Disney/ESPN+ Up Soccer Streaming

Soccer may be the world’s most-popular sport that has yet to generate mainstream appeal in the United States. But that isn’t stopping major domestic over-the-top video platforms from inking distribution deals with international professional leagues.

Disney’s recently launched OTT service ESPN+ signed a multi-year media agreement for three more top-division soccer leagues – Australia’s Hyundai A-League and Westfield W-League, the Chinese Super League and the Dutch Eredivisie.

In all, more than 300 matches per season from the leagues will be streamed live exclusively in the United States on ESPN+.

“This agreement further boosts the position of ESPN+ as the leading new platform for live soccer matches in the U.S.,” Burke Magnus, EVP of programming and scheduling at ESPN, said in a statement. “These leagues join a lineup of hundreds of top-division live matches from Europe and North America, along with a strong lineup of original and studio soccer programming.”

Last week, ESPN+ announced a new multi-year agreement with Serie A TIM that includes more than 340 Italian soccer matches per year. The streaming service is also home to MLS Live – a collection of more than 250 Major League Soccer out-of-market matches, as well as local market media home for the Chicago Fire.

ESPN+ will carry more than 100 live matches from the UEFA Nations League (UNL), a new tournament among the 55-member nations from the Union of European Football Associations played on FIFA international match days beginning in September. In addition, ESPN+ subscribers have access to hundreds of English Football League (EFL), the United Soccer League (USL) matches.

The service also streams “ESPN FC”, ESPN’s daily global soccer news, information and analysis program.

Separately, Facebook signed a deal with Spain’s La Liga soccer league to stream matches in Asia. The €90 million agreement will live-stream 380 matches in India, Pakistan, Bangladesh, Afghanistan, Maldivas, Nepal, Butan and Sri Lanka.

This summer Amazon Prime Video announced it would live-stream 20 Premier League soccer matches beginning in 2019.

 

New Facebook AR Mask Lets Fans Experience ‘Avengers: Infinity War’

Potential spoilers for Avengers: Infinity War ahead.

A new augmented reality enhancement for the Facebook mobile app is giving fans a chance to experience a key moment in Marvel Studios’ Avengers: Infinity War.

The Avengers: Infinity War custom Facebook AR mask is timed to celebrate the film’s release on Blu-ray, DVD and 4K Ultra HD Blu-ray Aug. 14. The movie is available now through digital retailers.

In the film, the Avengers must come together to stop an intergalactic warlord named Thanos from gaining the six Infinity stones, which when combined will allow him to achieve his goal of eliminating half the population of the universe with the snap of his fingers, a move he believes will alleviate the burdens of limited resources.

The AR mask’s camera effect allows fans to see themselves turn to dust as if they were a victim of Thanos’ snap.

To use the mask, fans simply log into their Facebook app with a mobile device and go to http://www.facebook.com/fbcameraeffects/tryit/258281704903067/ to load the AR effect. With the camera in selfie mode, users can implement the effect by opening their mouths. The video can be saved and posted to Facebook with the caption THANOS IS HERE! @Avengers #InfinityWar.

The effect is designed to work on iPhone devices 5s or newer and Android devices from 2012 onwards. The effect does not work on desktop computers.

Comcast CEO Brian Roberts Punts on Hulu Stake Question

Late in Comcast’s July 26 fiscal call, chairman/CEO Brian Roberts was asked about becoming a minority stake holder in Hulu should Disney’s $71 billion acquisition of 20th Century Fox Film and other Fox assets be approved.

Roberts replied management was not “prepared to address” some issues, which apparently included Hulu, which Comcast co-owns with Fox, Disney and WarnerMedia (formerly Time Warner).

Disney acquiring Fox would give it 60% ownership of Hulu, with Comcast holding 30% and WarnerMedia with 10%.

There’s no love lost between Disney CEO Bob Iger and Roberts when it comes to media mergers.

The two high-profile executives have been embroiled in competing bids to acquire controlling stakes in 20th Century Fox and British satellite TV operator Sky, among other properties.

With Disney planning to launch a branded over-the-top video platform in 2019, scuttlebutt suggests the Mickey Mouse company could hit the ground running incorporating Hulu — with 17 million subscribers — as part of its strategy increasing direct-to-consumer exposure with exclusive content.

Such a move could further undermine Comcast’s legacy cable business, which continues to lose consumers to cord-cutting and OTT video services such as Netflix, Amazon Prime Video — and Hulu.

“We’re focused on Sky now,” Roberts said. “We think it’s a great business, it will fit well, good use of capital. It’s also unique, but I don’t want to say anymore today and hopefully that addressed a number of your issues.”

‘Star Wars: The Clone Wars’ to Return on Disney Streaming Service

The popular “Star Wars: The Clone Wars” animated series will return with 12 new episodes to debut on Disney’s upcoming steaming service.

The announcement came July 19 during a 10th anniversary panel celebrating the show at the 2018 San Diego Comic-Con International.

Set during an intergalactic conflict taking place between the “Star Wars” films Attack of the Clones and Revenge of the Sith, “The Clone Wars” followed the adventures of young Anakin Skywalker, Obi-Wan Kenobi and their allies as they defended the Galactic Republic against the evil droid armies of Count Dooku.

Beginning with a theatrically released film in 2008 (distributed by Warner Bros.), the series originally ran for five seasons from 2008 to 2013 on Warner’s Cartoon Network, but was canceled not long after the Walt Disney Co. purchased Lucasfilm. A sixth season was released in 2014 on Netflix. All the seasons were also released on DVD and Blu-ray. However, several episodes remained unfinished despite the dialogue having already been recorded; assembled storyboards and rough animation from these unfinished episodes have released over the years online and shown to fans at conventions.

In addition, some story arcs were not completed, although the fates of certain characters were alluded to in other media, such as novels, comic books and the “Star Wars: Rebels” TV series, as if the episodes existed.

Supervising director Dave Filoni will continue in that role on the new episodes.

“I honestly didn’t think we would ever have the opportunity to return to The Clone Wars,” says Filoni. “Thanks to the relentless fan support and the team behind Disney’s direct-to-consumer streaming service, we will now get to tell more of those stories. We feel a tremendous responsibility to make something that lives up to the legacy that George Lucas created with the original series and I think our team, many of whom worked on the show from the beginning, has risen to the challenge.”

Walmart/Vudu Entering the SVOD Market is Fiscal Craziness

Media reports suggesting Walmart-owned Vudu.com will launch a subscription streaming video service in the fourth quarter to compete against Netflix, Amazon Prime Video and Hulu is noteworthy for a variety of reasons, including fiscal insanity.

Walmart has owned and operated Vudu – which rents and sells digital movies – since 2010 will little fanfare. Entering the SVOD space would be a major step up to a completely different market – one dominated in myriad ways by SVOD pioneer Netflix and Amazon.

Amazon, which competes with Walmart in ecommerce, offers Prime Video (among other Prime features) free to its members. But is Walmart ready to emulate Amazon’s spending of billions of dollars acquiring and/or producing original content?

Netflix this year will spend $8 billion on content. It ended the most-recent fiscal period with more than $18 billion in third-party content obligations. Amazon is spending about $6 billion, with Hulu, Apple, Google/YouTube collectively spending billions more as well.

To be sure, Walmart has the financial resources to compete with Netflix and Amazon, but why would it want to in a market already dominated by three players – and Disney planning to become the fourth?

Disney, which is about to become majority owner of Hulu, has a major Ace up its sleeve: Pixar, Lucasfilm (Star Wars) and Marvel movies. The titles dominate the box office – and ostensibly could drive SVOD traffic as well.

Walmart/Vudu own no studio, production house or marquee show runners as Netflix, Amazon, Hulu and Disney do.

Unless Walmart envisions Vudu SVOD as a loss-leader service driving traffic to its ecommerce website, simply streaming licensed TV shows and movies for $8 a month isn’t going to move the needle – just expenses.

 

Could Disney (Finally) Make Hulu a Netflix Killer?

NEWS ANALYSIS – With the Walt Disney Co.’s path to acquiring select 21st  Century Fox assets apparently cleared after Comcast dropped a competing bid, the Mickey Mouse company becomes the majority stake holder in Hulu.

The SVOD platform launched in 2007 has more than 17 million subscribers but remains an ongoing runner-up to Netflix and Amazon Prime Video in the United States.

With Disney in command, that could change. Disney has made no secret it believes direct-to-consumer distribution of entertainment is the future. It is planning to launch a branded SVOD service in 2019 after spending billions acquiring technical subsidiary BAMTech.

But why reinvent the wheel when Hulu already has brand recognition, and more importantly, could benefit from having exclusive access to Disney content, including Marvel, Pixar and Lucasfilm titles?

To be sure, such a move would incrementally benefit Hulu minority owners Comcast and WarnerMedia, but a collective approach featuring Disney’s coveted movies would appear to be requisite to any serious attempt to bridge the Netflix divide.

“Disney has already announced its plans to pull much of its content away from Netflix in 2019 and launch a competing service, and we suspect that the rollout of a Disney-led platform can be accelerated if the company uses Hulu as its base,” Michael Pachter, media analyst with Wedbush Securities in Los Angeles, wrote in a note.

Pachter contends that by setting up a competitive service and outbidding Netflix for content created by the owners of that service, i.e. Disney/Fox, Comcast and Warner, Disney/Hulu should be able to capture a portion of the $160 billion in enterprise value Netflix commands.

“A reconstituted Hulu could successfully compete with Netflix if its owners sell content to Hulu exclusively,” wrote Pachter. “A re-imagined Hulu could compete successfully with Netflix in attracting new subscribers.”

It could also help mitigate losses on the bottom line.

Disney in February disclosed it expects more than $250 million in equity losses on Hulu in 2018 — up from a previously disclosed loss of $100 million.

As a stake holder, Disney expects to recoup the loss through Disney-ABC Television Group content sales as well as various affiliate network revenue.

Regardless, it is on the hook for about $450 million in capital contributions to Hulu this year, according to a regulatory filing.

While regulators might raise concern over Disney having too much control of Hulu (an issue back when Comcast acquired NBC Universal), the OTT video landscape has changed significantly since then.

Netflix finished the second quarter (ended June 30) with more than 57 million domestic subscribers. But its subscriber growth in the U.S. is waning, which means there’s opportunity for a strong third-party competitor not named Amazon.

Indeed, Netflix has been transitioning to proprietary content in recent years in an effort to minimize the impact of rival services from its content providers.

“That was a bet we’d made a long time ago when we got into original programming,” CCO Ted Sarandos said on the July 16 webcast. “And every year since that, we’ve been doing less and less off-net business with Disney and Fox. And our bet is that is long term, that they’ll want all of their content on their service.”

Comcast Ends Pursuit of 20th Century Fox, But Not Sky

As expected, Comcast Corp. July 19 officially dropped out of its attempt to acquire select assets of 21st Century Fox, including 20th Century Film and majority ownership of Hulu.

The media giant was considering upping its $65 billion offer for Fox, which included a 39% stake in British satellite TV distributor Sky.

“Comcast does not intend to pursue further acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky,” the company said in a statement.

Comcast currently has a $34 billion (£14.75 per share) offer on the table for Sky, which exceeds Fox’s revised offer of £14 per share.

The decision should clear a path for Disney’s $71.3 billion bid, which has been approved by Rupert Murdoch, majority shareholder of 21st Century Fox.

“I’d like to congratulate [Disney CEO] Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company,” said Comcast chairman/CEO Brian Roberts.